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The Money Multiplier Differs from the Deposit Multiplier in That

Question 96

Multiple Choice

The money multiplier differs from the deposit multiplier in that the money multiplier:


A) Indicates the amount of deposits and loans that will result from an injection of new excess reserves into the system
B) It does not take into account the required legal reserve ratio which is constant
C) It defines the relationship between the size of the money supply and the size of the excess reserve base
D) It accounts for cash held by the public in the numerator because this cash must be accounted for in measuring growth of the money supply over time
E) None of the above

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